pid-2303232-dt-content-rid-495494 161/courses/19574.201910/Homework%231.pdf rs-
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pid-2303232-dt-content-rid-495494 161/courses/19574.201910/Homework%231.pdf rs- Engin Force Vectors Engin A Mechanics of Mater chapter 2 tutorial pd A Mechanics You borrow S2,000 from a bank at 9% interest. How much money would you save if the interest were simple interest rather than compound interest? Figure the amounts for 4 years. 2. a. $196 b. $103 c. $720 d. $500 3. A small business owner deposits $3,000 in the bank. At the end of one year, he withdraws the whole amount of S3,200. What was his rate of return? a, 996 b. 13% . 7% d.2% 4. How much money should be deposited, for the next 6 years, to have $8,000 at the end of the 6 years at an interest rate of 8% per year? a. $2,142 b. $1,091 c. $863 d. $392 5. A company guarantees that all new employees will get a bonus of $700 in year 1 and amounts increasing by $50 each year. What is the present worth of the bonuses for 6 years, if the interest rate is 6% per year? a. $1,600 b. $5,500 c. $7,150 d. $4,015 You plan to invest your bonus (at the end of this year) of S3,500 into a business that is guaranteed to make 12% per year, what will be the present worth of 3 years, worth of investments if the amount of your bonus increases by 10% each year? 6. a. $9,200 b. $6,100 c. $8,400 d. $12,200 7. The amount of money a person must deposit 3 years from now in order to be able to withdraw $10,000 per year for 10 years beginning 15 years from now at an interest rate of 11% per year is closest to: a. b. c. d. P:: 10.0000 P/A,11%,10) (P/F,11%12) P-10,000( P/A. 11%-10) (P/F, 119011) P-10.000(P/A,11%, I i ) (P/F,11%12) P 10,000(P/A,11%,1) (P/F.11%11Explanation / Answer
(2) (b)
Compound interest for 4 years ($) = 2,000 x [(1.09)4 - 1] = 2,000 x (1.4116 - 1) = 2,000 x 0.4116 = 823
Simple interest for 4 years ($) = 2,000 x (4 x 0.09) = 2,000 x 0.36 = 720
Saving = $823 - $720 = $103
(3) (c)
Rate of return = ($3200 / $3000) - 1 = 1.0667 - 1 = 0.0667 = 6.67% ~ 7% (rounded off)
(4) (b)
Annual savings ($) = 8,000 / F/A(8%, 6) = 8,000 / 7.3359** = 1,091
(5) (d)
Present worth ($) = 700 x P/F(6%, 1) + 750 x P/F(6%, 2) + 800 x P/F(6%, 3) + 850 x P/F(6%, 4) + 900 x P/F(6%, 5) + 950 x P/F(6%, 6)
= 700 x 0.9434** + 750 x 0.8900** + 800 x 0.8396** + 850 x 0.7921** + 900 x 0.7473** + 950 x 0.705**
= 660.38 + 667.5 + 671.68 + 673.29 + 672.57 + 669.75
= 4,015
NOTE: As per Answering Policy, 1st 4 questions have been answered.
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